Using demand and supply analysis, graphically illustrate how the equilibrium price and quantity will change under the two following scenarios. Be certain to properly label your graphs. a) Market for biogas: Over the past year, the number of houses in one country using bio gas for heating increases while the number of companies producing biogas decreases. b) Market for instant noodle (an “inferior” good): Over the past year, the average income in one country rose by 5% while the union of instant noodle company leaders managed to gain large wage increases for their workers.
Using demand and supply analysis, graphically illustrate how the equilibrium price and quantity will change under the two following scenarios. Be certain to properly label your graphs. a) Market for biogas: Over the past year, the number of houses in one country using bio gas for heating increases while the number of companies producing biogas decreases. b) Market for instant noodle (an “inferior” good): Over the past year, the average income in one country rose by 5% while the union of instant noodle company leaders managed to gain large wage increases for their workers.
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
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Question
Using demand and supply analysis, graphically illustrate how the
quantity will change under the two following scenarios. Be certain to properly label your
graphs.
- a) Market for biogas:
Over the past year, the number of houses in one country using bio gas for heating
increases while the number of companies producing biogas decreases.
- b) Market for instant noodle (an “inferior” good):
Over the past year, the average income in one country rose by 5% while the union of
instant noodle company leaders managed to gain large wage increases for their
workers.
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